The shipment of 3.3 million DVD units of the psychological thriller has made Saw's Feb. 15 release the largest ever for the Santa Monica, Calif.-based studio.

The film earned $55 million at the box office. Lions Gate will release the sequel Saw 2 theatrically on Halloween.

Sales of other Lions Gate videos, such as Open Water, The Cookout, The Punisher, Barbie in The Princess and the Pauper, Care Bears: Journey to Joke-a-Lot, It's a Wonderful Life, Godsend and SNL: The Best of Will Ferrell, helped the studio post third-quarter (ended Dec. 31) fiscal 2005 net income of $3.4 million, or 3 cents per diluted share, on revenue of $190 million.

The studio (prior to the Artisan acquisition) posted a net loss of $37.9 million, or 45 cents per share, on revenue of $70.6 million during the same period last year.

Lions Gate Home Entertainment generated $120.8 million of the quarter's $190 million in revenue.

“By the end of the fiscal year, we believe our percentage of the home video market share will be well over 4 percent,” said Lions Gate CEO Jon Feltheimer during a call with investors.

In addition to “Saturday Night Live” and “Moonlighting,” Lions Gate is actively pursuing two “large catalog” TV programs for future release on DVD, said Lions Gate Home Entertainment president Steve Beeks.

He added that the studio will make a decision this summer about which next-generation high-def disc format — HD-DVD or Blu-ray Disc — to support.

“It's too early right now to see which format might have the advantage,” Beeks said.

Feltheimer also didn't rule out the possibility about the formation of a horror network on cable, featuring Lions Gate catalog titles such as The Blair Witch Project, House of 1,000 Corpses and Cabin Fever.

In related matters, Feltheimer announced that Katie McEnroe, former cable executive at Rainbow Media, would head Lions Gate's budding digital distribution and on-demand initiatives.